Assignment 2 2010/1

Table of Contents

1.0 Executive Summary 3

2.0 Situational Analysis 4

2.1 Market Analysis 4
2.2 Macro-environmental Analysis 5
2.2.1 Economic Environment 5
2.2.2 Political and Legal Environment 6
2.2.3 Social and Cultural Environment 7
2.2.4 Technological Environment 7
2.3 Competitive Analysis 7
2.4 Customer Analysis 12
2.5 Distribution Channels Analysis 12
2.6 SWOT Analysis 13

3.0 Objective 14
3.1 Mission Statement 14
3.2 Corporate Objective 14
3.3 Marketing Objectives 14
3.4 Sales and Financial Objectives 14
3.5 Product Objectives 15

4.0 Marketing Strategy 15

5.0 Marketing Mix Strategy 15

5.1 Product Strategy 15
5.2 Pricing Strategy 16
5.3 Promotion Strategy 17
5.4 Place Strategy 18
5.5 Sales Force Strategy 18
5.6 Action Program 19
6.0 Forecasts and Financials 20

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6.1 Sales Forecast 20

6.2 Budgets & Projected Profit and Loss Statement 21

7.0 Control – Feedback 22

8.0 Reference 25

Marketing Plan 2011

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Low End Market Segment

Home Peanut Garden Food Industries Pte. Ltd.

1.0 Executive Summary

Home Peanut Garden starts from a very humble traditional Chinese family business from
small operation side at a house-kitchen into an industrial lot with total area of 47, 318 square
feet. It is a specialist in bulk producing fried and roasted peanuts, beans and peas. Its biggest
targeted market segment is the wholesale and retail low end market which is a highly
competitive market. This market segment of Home Peanut Garden is experiencing gradual
decrease in market share from 35 percent in 2008 to 28 percent in 2011 due to the highly
competition. Nevertheless, by further exploiting Home Peanut Garden’s competitive
advantage of economies of scale, a significant profit and growth of market share is still
anticipated.

The purpose of this marketing plan is to outline the complete marketing strategy in
2011 for Home Peanut Garden to implement a series of tactics for its low end market segment
in order to turnaround the situation. As stated in the marketing strategy, Home Peanut Garden
is looking for a 5 percent growth of market share to achieve 33 percent of market share in this
low end market segment.

This marketing plan will firstly analysis the market circumstance in Malaysia,
including the analysis of other macro-environment factors such as economic environment,
political and legal environment, social and cultural environment, technological environment,
as well as the analysis of micro-environment factors such as competitive analysis, customer
analysis and distribution channels analysis. These are followed by a SWOT analysis which
pinpoints the strengths, weaknesses, opportunities as well as threat of Home Peanut Garden
in 2011.

As stated in the company’s mission statement:

Home Peanut Garden aims to be the long lasting leading processor and distributor of
top quality food stuff especially in peanut, bean and pea. It is committed to provide

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quality products which consistently meet customer’s satisfaction and legal

requirements.

The targeted low end market segment worths RM 10 million. It consist of another
four major player including Sin Chian Hing, Thien Cheong, Nagajati and Juta.

An overall marketing strategy for Home Peanut Garden and more specific actions
program for each of the marketing mix tactics are outlined here. The actions programs
include using new plastic packaging with brand and contact information printed, increasing
the sales force personnel and telemarketers, creating pricing system to offer price quantity
discount and special event price, advertising in yellow pages, establishing company website,
forming a van sales service team, creating proper criteria for selection and evaluation of new
customers as well as training to sales forces team in technical knowledge.

A sales forecast which divides the sales revenue and unit sales by quarters, channels
and regions is presented here. It is followed by a budget for actions programs and a projected
profit and loss statement for the next three years from 2011 to 2013. Investment in marketing
will result the first year loss up to RM 150 500. However, Home Peanut Garden will reach
the break-even point before the end of 2012.

Home Peanut Garden plans stringent control to achieve the timely implementation of
this marketing plan by assigning person-in-charge for its action program with specific final
review date. Metrics to be monitored include overall sales volume, sales by channels, sales by
region, cost, return on sales and return on investment.

2.0 Situational Analysis

2.1 Market Analysis
The target markets of Home Peanut Garden products consist of three major market segments:
• Low end market through wholesalers and retailers worth RM 10 million
• Original equipment manufacturer worth RM 3 million
• High end market through hypermarket, convenient chain shop, petrol station worth
RM 8 million

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Home Peanut Garden is majoring in low end market segment with 28 percent of
market square. Those products in this market segment are bulk pack series product in a
cheaper packaging material which is available in 1kg, 2kg, 5kg and 20kg. This is a highly
competitive market in which Home Peanut Garden as the only one well established as well as
HACCP and ISO 9001 certified fried peanut, bean and pea manufacturer in Malaysia has to
compete with those small industries in this market segment. The business customers focus
mainly on the prices offered by the manufacturers. Although this market is treated by the
rapid growth of high end market due to the upgrade of the average life standard and education
level of local population, the low end market is still experience a steadily growth during these
recent years which due to the existence of 2.2 million foreign population in Malaysia labour
market (DOSM, 2009) and the major segment of low income of local population. However,
in the context of Home Peanut Garden, the market share in this market segment has decreased
from 32 percent in 2009 to 28 percent in 2010.

2.2 Macro-environmental Analysis

2.2.1 Economic Environment
The well progress of economic recovery of Malaysia in 2010 from the global economic crisis
and the global food crisis in 2008 has elevated the consumer confidence and increased the
consumer buying powder (DOSM, 2010). However, with a series of disasters and extreme
climate happens in all over the worlds throughout the year of 2010 has heavily affected the
harvested of peanut in the world major peanut exporter such as China, India, Argentina and
Vietnam. Adding with the prediction of the economist that the price of petroleum is raising
high in 2011 (OPEC, 2010), the raw material price is going up too as some of the raw
material will be sold to biofuel industries as price offered is getting higher (FAO, 2010). The
inflation will rise too.

The predicted economic conditions in 2011 present opportunities and treats to Home
Peanut Garden. As this market segment is a highly competitive market, price is the major
competitive advantage to gain market shares. The increasing of raw material prices will force
the competitors which most of them are small scale industries to increase their price
immediately. In contrast, Home Peanut Garden can maintain its price or do some offering
during this period as its keep a lot of raw material stock. However, the reality of inflation

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may cause a totally decrease in the demand of the whole low end market that directly affect
the revenue of Home Peanut Garden in this market segment.

2.2.2 Political and Legal Environment

The political climate in Malaysia is getting warm as the neck-to-neck election result of the
National Election 2008. The Barisan Nasional Union eventually manage to form the federal
government but they lose two third majority voice in parliament and some of their state
government lose (The Star, 2008). Since then, the federal government under the leadership of
Prime Minister, Datuk Seri Najib Tun Razak strives hard to maintain its reputation and
support from people by introducing change in the government sector by introducing Key
Performance Index to increase the efficiency of government department. Thus the frequency
as well as the stringency of operations to examine the condition of food industries especially
manufacturing environment have increased.

Besides, government under the Ministry of Health also takes initiative to review the
Food Act 1983 and Food Regulation 1985 for updating and adding some regulation to suit the
current situation for the competitive of Malaysia food industry. For instance, the new Food
Hygiene Regulation 2009 has been gazette since March of 2009 (MOH, 2009). Under this
regulation, all food manufacturers in Malaysia are required to establish a complete
traceability system, food safety control documentation, follow some standard requirement of
the manufacturing environment and workers hygiene which are similar to the requirements in
HACCP and ISO 9001 implementation.

This legal and political action has brought opportunity to Home Peanut Garden as it
has achieved the certification of HACCP and ISO 9001 since 1997. That means Home Peanut
Garden is obeyed to the requirements in the new Food Hygiene Regulation while most of the
competitors are not getting ready yet to embrace the new regulation as they have not prepared
to invest a lot in implementing the system as it might affect their cost of manufacturing.

2.2.3 Social and Cultural Environment

Elevated education level of consumer nowadays has increased their awareness of healthy
lifestyle which including the consuming of healthy food (Sundram, 2007). The consumer will
seek for some nutritive and safety information of the product they buy. In this context, again

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Home Peanut Garden stands a better situation among its competitors as it has established its
laboratory as well as its Quality Assurance Department with qualified quality assurance
personnel who always ready to provide this additional information to its customer. However,
for some customers, they might simply stop or avoid themselves from taking peanut as they
might perceive that eating peanut is not healthy. As such, this might be a treat for Home
Peanut Garden in gaining the market share.

2.2.4 Technological Environment

Technological advancement nowadays increases the usage of internet. This results in more
and more consumers or business customers searching for information of manufacturer
through internet. It could be a treat for Home Peanut Garden as it has not developed its
website to bring relevant info to its potential web visitors whereas some of its competitors
have had their website already.

2.3 Competitive Analysis

Figure 1 General Competitive Feature

Company Customer Product Product Technical Sales
Awareness Quality Availability Assistance Force
Home Peanut Garden G G G F F
Sin Chian Hing P F G P P
Thien Cheong E G F F G
Nagajati F G P G F
Juta F F G P F
Note: E = Excellent, G = Good, F = Fair, P = Poor

Figure 2 Market Share, Mind Share and Heart Share

Company Market Share (%) Mind Share (%) Heart Share (%)
2008 2009 2010 2008 2009 2010 2008 2009 2010
Home Peanut Garden 35 32 28 20 19 22 33 28 26
Sin Chian Hing 18 26 20 25 28 25 20 28 25
Thien Cheong 20 23 25 42 41 45 30 30 31
Nagajati 12 9 10 7 5 2 7 4 6
Juta 15 10 17 6 2 2 10 10 12

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Figure 3 Product, Price, Promotion, Place (Distribution) Analysis

Company Product Price Promotion Place
Home Peanut Garden Peanut - Demand-based - Telemarketers - Widely
- Shung Tong pricing. - Direct Sales Distributed
Peanut - Slightly higher Force In Peninsular
- Fried Peanut than Malaysia and
- Coated Peanut wholesales Several places
- Peanut Candy market In East
Block price. Malaysia.
Bean
- Skinless Broad
Bean
- Skin Broad
Bean
- Coated Broad
Bean
Pea
- Green Pea
- Coated Green
Pea
- Chick Pea
- Coated Chick
Pea
Sin Chian Hing Peanut - Demand-based - Telemarketers - Concentrate
- Shung Tong Pricing - Website In North part
- Fried Peanut - Follow - Direct Sales Of Peninsular
- Coated Peanut wholesales Force Malaysia
Tree Nut market
- Cashew Nut price
- Pistachio Nut
Bean
- Skinless Broad
Bean

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- Skin Broad
Bean
- Coated Broad
Bean
Pea
- Green Pea
- Coated Green
Pea
- Coated Chick
Pea
Thien Cheong Peanut - Competition- - Telemarketers - Widely
- Shang Tong based pricing - Website Distributed
Peanut - Low cost - Direct Sales In Peninsular
- Fried Peanut wholesale Force Malaysia and
- Coated Peanut price leader. - Van sales East Malaysia
- Yellow Dhall
Bean
- Skinless Broad
Bean
- Skin Broad
Bean
- Coated Broad
Bean
Pea
- Green Pea
- Coated Green
Pea
- Chick Pea
- Coated Chick
Pea
Nagajati Bean - Demand-based - Telemarketers - Distributed in
- Broad Bean pricing. - Website Several places
- Coated Broad - Follow - Direct Sales In Peninsular

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Bean wholesales Force Malaysia.

Pea market
- Green Pea price.
- Coated Green
Pea
Juta Peanut - Demand-based - Telemarketers - Distributed in
- Peanut cracker pricing. - Website Several places
- Shung Tong - Follow - Direct Sales In Peninsular
Peanut wholesales Force Malaysia.
- Coated Peanut market - Van Sales
Tree Nut price.
- Cashew Nut
- Coated
Cashew Nut

The low end market segment for the product of peanut, bean and pea snack has many
manufacturers competing for a RM 10 million markets in Malaysia. It is a highly competitive
market which there is no entry barrier by the new entrants and the price of the product is
normally following the wholesale market price. This industry is made up of a broad range of
competitors who have quite a numbers of years in manufacturing experiences. Most of them
are owned by Chinese businessmen who run the business in a very traditional style.
Home Peanut Garden has identified four main direct competitors in the low end
market segment who are:
• Sin Chian Hing Food Industries Pte. Ltd.
• Thien Cheong Pte. Ltd.
• Nagajati Food Pte. Ltd.
• Juta Food Industries Pte. Ltd.

Sin Chian Hing offers a wide range of product from peanut, tree nut, bean to pea. It
has its competitive advantage over Home Peanut Garden by offering cheaper price and
having its website as a promotion tool. However, it has average lower scoring in general
competitive feature and market share (figure 1) among those competitors as its market
concentrates at the north part of Peninsular Malaysia.

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Thien Cheong also offers a wide range of product as Sin Chian Hing. It has excellent
customer awareness over Home Peanut Garden and other competitors (figure 1) as it is the
earliest established manufacturer since 1955 that have several decades of experience in this
low end market segment. Thien Cheong products have been widely distributed in whole
Malaysia but having lower market share comparing to Home Peanut Garden. Besides, Thien
Cheong also offers van sales (figure 3) service to serve its small retailers more directly.

Nagajati competes with Home Peanut Garden by offering bean and pea products
(figure3). As it involve in the manufacturing of other food categories such as glucose syrup,
its product range in peanut, bean and pea categories is very narrow and its products are just
available in several places. However, it has good technical skill in providing its specialized
quality product – coated green pea over Home Peanut Garden.

Juta which located in Melaka also offers few types of product (figure 3) and relatively
lower market share (figure 2) comparing to Home Peanut Garden. However, it competes with
Home Peanut Garden by having its attractive design of website, lower prices and van sales to
serve its small retailers more directly.

2.4 Customer Analysis

The manufacturers targets to bigger scale wholesalers as well as smaller scale retailers. These
targeted customers most of them are Chinese men business who put the price as priority and
quality as minority in their purchase decision making. Besides, most of them do not have
proper procurement plan and always ask for the delivery of products as immediate as possible
once the purchase order has been issued. They tend to maintain long term business-to-
business relationship which manufacturers as long as they are being offered good price in
their perception.

2.5 Distribution Channels Analysis

There is various available distribution channels with different various intermediaries involved
in this low end market segment. Some involve one intermediary and some involve multi
intermediaries. The intermediaries include retailers or wholesalers. Besides, some of them

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also sales their products directly to consumers such as cash and carry corner in Home Peanut
Garden and retail store in Dataran Pahlwan Megamall in Melaka by Juta,

Figure 4 Competitors’ Distribution Channels

Company Distribution Channel Distribution
Method
Home Peanut Garden Producer Wholesalers Consumer Lorry
Producer Retailer Consumer Lorry
Producer Wholesalers Retailer Consumer Lorry
Producer Agent Retail Consumer Lorry/Ship*
Producer Consumer Cash &
Carry
Sin Chian Hing Producer Wholesalers Consumer Lorry
Producer Retailer Consumer Van
Producer Wholesalers Retailer Consumer Lorry/Van
Thien Cheong Producer Wholesalers Consumer Lorry
Producer Retailer Consumer Lorry/Van
Producer Wholesalers Retailer Consumer Lorry
Producer Wholesalers Agent Retailer Consumer Lorry/Ship*
Producer Consumer Cash &
Carry
Nagajati Producer Wholesalers Consumer Lorry
Producer Retailer Consumer Van
Producer Wholesalers Retailer Consumer Lorry/Van
Juta Producer Wholesalers Consumer Lorry
Producer Retailer Consumer Van
Producer Wholesalers Retailer Consumer Lorry/Van
Producer Consumer Retail Store
Note: * Destination in East Malaysia

According to Figure 4 competitors’ distribution channels, Home Peanut Garden

employs various different distribution channels as Thien Cheong and both of them are
already entering the East Malaysia market. Juta has a competitive advantage of owning a

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retail shop in a state famous shopping mall. Besides, Juta and Thien Cheong also establish
their van sales team to better serve their usually being ignored small scale retailers.

2.6 SWOT Analysis

Strength
• Experienced Managing Director with over 20 years of experience of technical skill in
manufacturing.
• HACCP and ISO 9001 certified company.
• High volume of production output (advantage of economies of scale)
• Higher capacity of storage.
• Strategic location at the centre part of Peninsular Malaysia.

Weaknesses
• Traditional Chinese family business with conservative style of management.
• No company website.
• No van sales to service the small retailers directly.
• Higher products price.

Opportunities
• Enforcement of Food Hygiene Regulation 2009 by the Ministry of Health
• Increasing awareness of consumer towards food safety and food quality certification.

Threats
• Global Food Crisis prediction in 2011 which may lead to rising price of raw material.
• Rising price of petroleum which may lead to shortage of raw material.
• Increasing competition.

3.0 Objective
3.1 Mission Statement
Home Peanut Garden aims to be the long lasting lead processor and distributor of top quality
food stuff especially in peanut, bean and pea. It is committed to provide quality products
which consistently meet customer’s satisfaction and legal requirements.

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3.2 Corporate Objectives

Additional corporate objective for Home Peanut Garden are as follow:
• Continuously increase the customer awareness of brand of the products.
• Achieve continual improvement in the near future and future.
• Continuously implement the customer oriented policy.

3.3 Marketing Objectives

Home Peanut Garden is looking for turning around the current gradually slighting down of
market share situation in the low end market segment which is from 35% in 2008 to 28% in
2010 (Figure 2). It aims to generate RM 3.3 million of annual revenue from this market
segment in 2011, which is equal to 33% of the total target market segment. Home Peanut
Garden is looking forwards a growth of 5% market share in this market segment (RM 0.5
million) after several years of recession or in other words to achieve 17.85% of sales growth.

3.4 Sales and Financial Objectives

• Increase revenue by RM 0.5 million to achieve a turnover of RM 3.3 million in 2011.
• Keep the product return below 2%
• Reduce customer complain to not more than one case per month.

3.5 Product Objectives

Home Peanut Garden strives to gain continual improvement for its products and services in
this increasing competitive market segment. The goal is to be innovative in product costing
and quality controlling to create value added product with reasonable price to customers and
consumers.

4.0 Marketing Strategy

Overall, there is RM 21 million of wholesale and retail market for peanut, bean and pea
products locally, Home Peanut Garden aims to target on:
• Low end market through wholesalers and retailers worth RM 10 million
Therefore, Home Peanut Garden targets to introduce and implement a series of market
turnaround strategy to stop the decreasing trend of market share in this market segment and

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looking for a growth of 5% to achieve 33% of market share in 2011. In conjunction to this
targeted market segment, Home Peanut Garden will foster an even more rapport business-to-
business relationship with its wholesalers and retailers to become more responsive to this
market segment trend.

Home Peanut Garden positions itself in this market segment as a value added business
partner to its wholesalers and retailers with competitive price offering by further exploring its
competitive advantage of economies of scales. Home Peanut Garden will enhance its good
reputation and strive to maintain long-term business partnership with its well performed
wholesalers and retailers.

5.0 Marketing Mix Strategy

5.1 Product Strategy
Home Peanut Garden will continue to adopt its global sourcing strategy for a quality peanut,
bean and pea. Particularly, Home Peanut Garden will continue its very efforts to ensure the
peanut suppliers’ crops are conform to Malaysian Food Regulation 1985 which Aflatoxin
content is below 15 parts per billion (MOH, 2010)

Home Peanut Garden will enhance its product quality by adding the quality control
manpower to implement the stringent quality inspection from the aspect of product typical
characteristics such as colour, odor, texture, cook status and taste. Besides, investigation will
be carried out for every batch of product return to form the input for product quality
improvement.

In order to ensure the consumer get to buy the freshest and tastiest product, Home
Peanut Garden will enhance the technical knowledge and awareness of its wholesalers and
especially the small scale retailers regarding to the perfect condition of product storage as
well as the important of the implementation of First-in-first-out (FIFO) system in stock
rotation.

Besides, Home Peanut Garden will replace its plain plastic packaging with brand and
contact information printed plastic packaging as a step to clearly differentiate its products

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from other competitors’ products to avoid any confusion of product quality issues and to
increase the brand awareness among the customers of Home Peanut Garden.

5.2 Pricing Strategy

Home Peanut Garden’s products price are currently can be defined as demand-based pricing
in this highly competitive market. Thus, the price elasticity of demand is very high which
means that the customers are sensitive to price change and most probably they will change
suppliers due to the amendments of products price. Since Home Peanut Garden is the only
producer who fully implements the HACCP and ISO 9001 system, the products prices
offered are slightly higher than its competitors.

As practiced by most business-to-business market suppliers, Home Peanut Garden

currently adopts the differential pricing strategy for different customers based on different
contract. In conjunction with the marketing objective to achieve 17.85% of growth in revenue
in this low end market segment in 2011, it is recommended that Home Peanut Garden offers
price quantity discount for new customers who sign up 12 months contract to create loyalty
and help manage demand fluctuation. The price of discount offered can be coped with the
advantage of economies of scales by running production in bulk.
In the context of customer with long-term business relationship, besides the price
quantity discount offering, it is recommended that Home Peanut Garden also offers special
event pricing during festive season as sales volume normally grows to more than doubles
during some Malaysian major festivals. However, this discount should only offer to those
who confirm the volume of festive purchasing three months earlier before the festival as for
facilitating the production planning and for widening the sales volume curve peak from one
month to three months for each festive season as well.

5.3 Promotion Strategy

Home Peanut Garden currently employs both push and pull promotion strategies. A push
strategy is approaching the targeted wholesalers and retailers through an employed direct
sales force and through telemarketers as well. On the other hand, pull strategy is the after
sales services from sales force to create demand which draws customers to the company.
These after sales services including the following of stock level in customers’ inventories and
arrangement of the transportation of returned product.

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It is recommended that Home Peanut Garden strengthen its push marketing strategies
by increasing the sales force personnel and the telemarketers to provide better service and
timely response to the increasing number of customers.

Besides, Home Peanut Garden will employ Integrated Marketing Communication to

maximize the communication effect including advertising and personal selling. It is
recommended that Home Peanut Garden advertises its information as a peanut, bean and pea
snack producer in yellow page which is much referred by the searchers from targeted market.
Secondly, Home Peanut Garden is going to establish its company website which aims for all
segment markets. However, Chinese language version webpage will be integrated particularly
for this low end market segment.

Nevertheless, Home Peanut Garden will emphasize on personal selling as the major
effort to persuade customer to buy products. A newly design brochure which include a few
latest products and updated company profile will be distributed by the personal sales force.
Besides, the personal sales force may present the company profile, services and products by
using attractive power point presentation to some of the customer depending on the need of
the situation. Sample will be given out to customer actively to persuade them to sales the
product.

5.4 Place Strategy

The product of Home Peanut Garden in this low end market segment is currently widely
distributed in whole Peninsular Malaysia and several places in East Malaysia. Currently, its
distribution channels are mainly by wholesalers and retailers. To serve the small retailers in
better way, Home Peanut Garden will form a van sales service team to compete with its
competitors such as Thien Cheong and Juta. It is essential as its wholesalers cannot penetrate
into very single unit of small scale retailers. Besides, the van sales service can provide better
stock management on retail side by arranging the product on the shelf to make sure Home
Peanut Garden product is placed at sight capturing corner, the product is looked tidier and
cleaner as well as consumer get to buy its product in fresh condition.

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In addition, Home Peanut Garden will re-evaluate its transportation efficiency

especially during festive season. It is recommended that Home Peanut Garden to outsources
part of its transportation service in order to reduce the constraint of delivery arrangement and
the inventory holding cost during festive season.

Besides, Home Peanut Garden will initial proper criteria for screening and selection
of new customers as this is become important to make sure its customer plays their role
efficiently and effectively in these increasing competition market segment. These criteria
include the conformance of payment terms, percentage of product return due to bad practice
of product storage condition and system as well as annual sales minimum.

5.5 Sales Force Strategy

Home Peanut Garden aims to make its sales force to become more effective and productive.
As stated in Sales Objective that Home Peanut Garden aims to increase the sales revenue by
RM 0.5 million in 2011, an effective and aggressive sales force team will be built by adding
two newly recruited sales representatives.

The group of four sales representatives will be restructured based on regional market
such as northern region which covers Perlis, Kedah, Penang and Perak, centre region which
covers Selangor and Kuala Lumpur, southern region which cover Negeri Sembilan, Melaka
and Johor as well as east coast region which cover Pahang, Kelantan and Terengganu.

The sales force team previously is just taking the role of order taker as they need to
cover the whole Peninsular Malaysia market by two personnel. Now, they are covering
regional market but are given additional new tasks as technical knowledge provider
especially the storage of product after given a series of intensive training program to them. In
addition, each sales representative is being empowered to plan for the sales strategy for its
covering region. They need to establish sales strategy for each region before the beginning of
the year 2011 and the sales strategy should be approved by the Marketing Manager.

5.6 Action Program

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Mar

Apr

May

Aug

Nov
Dec

Dec
Feb

Jun
Jan

Sep

Oct
Jul
No Action Program
Adding quality control
1 manpower.
Use plastic packaging material
with brand and contact
2 information printed.

Create pricing system to offer

3 price quantity discount
to new customers who sign up
12 months contract.
Create pricing system to offer
4 special event pricing for
qualified current customers.
5 Increase the sale force personnel
and telemarketers.
6 Advertise in yellow pages.
7 Establish company website.
Distribute new design and
8 update brochure.
9 Form a van sales service team.
Outsources part of the
10 transportation service during
festive season.
Create proper criteria for
11 screening and selection
of new customer.
12 Intensive training to sales force
team in technical knowledge.
13 Establish sales strategy for each
region by sales representative.
6.0 Forecasts and Financials
6.1 Sales Forecast
Total sales revenue for all products that offered in this low end market segment by Home
Peanut Garden in 2011 is projected to RM 3.3 million, based on sales of 730 000 units
(kilograms) at an average wholesale or retail price of RM 4.25. Home Peanut Garden
anticipates first-quarter sales of RM 0.8 million, second-quarter sales of RM 0.4 million,
third-quarter sales of RM 1.5 million and fourth-quarter sales of RM 0.6 million. These
projections assume the accumulatively highest business sales in third-quarter as during the
Hari Raya Aidilfitri Festive season in the end of August which is celebrated by the majority

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of population in Malaysia. By contrast, second-quarter is projected to lowest business sales as

there is no any festive season. Figures 5 shows unit sales forecasts by region and channel.

Figure 5 Sales Forecasts by Regions and Channels in 2011

By Region Unit Sales (kg)
Northern Region 140 000
Centre Region 280 000
Southern Region 150 000
East Coast Region 90 000
East Malaysia Region 70 000
Total 730 000
By Channel Unit Sales (kg)
Wholesalers 310 000
Retailers 260 000
Van Sales Service 90 000
Agent 70 000
Total 730 000
6.2 Budgets & Projected Profit and Loss Statement
Investment in improved product packaging, manpower, additional distribution channel as
well as communication channels will result to a first-year loss of up to RM 150 500.
However, Home Peanut Garden should reach the break-even point just before the end of the
second year, the realization of marketing strategy will enables Home Peanut Garden to
exploit the advantage of economies of scales by lowering the production costs as volume
increases. During the second year, it is recommended that Home Peanut Garden reduces the
wholesale or retail price and dramatically increase the sales volume. The three years
marketing budgets cover staff salary, advertising, promotion, sales material, distribution
expenses and training.
Figure 6 outline the marketing mix budget for three years.

Figure 6 Marketing Mix Budgets for the year of 2011, 2012 and 2013
Marketing Mix Strategy 2011 2012 2013
Staff Salary

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Sales Force Personnel 168 000 177 600 187 200

Telemarketers 20 500 22 800 25 200
Advertising
Yellow Pages 5 000 3 000 3 000
Website 25 000 1 000 1 000
Promotion
Price quantity discount 166 500 200 000 240 000
Special event price 120 000 155 000 190 000
Sales Material
Brochure 10 000 3 000 3 000
Distribution Expenses
Van sales 85 000 100 000 120 000
Outsourcing transportation 25 000 50 000 75 000
Training
Sales training and support 25 000 25 000 25 000

Figure 7 Projected Profit and Loss Statement in the year of 2011, 2012 and 2013
Year
2011 2012 2013

Gross sales/ Turnover 3 330 000 4 000 000 4 800 000

Cost of good sold (2 664 000) (3 000 000) (3 456 000)

Gross Profit 666 000 1 000 000 1 344 000

Expenses
Staff salary (188 500) (200 400) (212 400)
Advertising (30 000) (4 000) (4 000)
Promotion (286 500) (355 000) (430 000)
Sales material (10 000) (3 000) (3 000)
Distribution expenses (110 000) (150 000) (195 000)

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Training (25 000) (25 000) (25 000)

Net profit before tax 16 000 262 600 474 600

Tax (166 500) (250 000) (336 000)
Net profit after tax (150 500) 12 600 138 600

7.0 Control – Feedback

As the economic environment is full of uncertainties due to the currently rising of the price of
petroleum as well as the predicted another global food crisis that may occur during the first
and second quarter in 2011, Home Peanut Garden will continually evaluate the marketing
macro-environment. In the context of marketing micro-environment, if a major competitor
initiates a price war, Home Peanut Garden will revise the marketing plan as an essential step
to maintain its leader position in this market share while retain a minimal acceptable level of
profitability.

In addition, each action program will be assigned to a person-in-charge who will be

responsible to the effectively implementation of the action program and a specific final
review date as shown in the Figure 8 below.

Figure 8 Action Program with Person-in-charge and Review Date

No Action Program Person-in-charge Review Date
1 Adding quality control manpower HR Manager Jan 2011
2 Use plastic packaging material with Procurement Manager Apr 2011
brand and contact information printed
3 Create pricing system to offer price Marketing Manager Feb 2011
quantity discount to new customer who
sign up 12 months contract
4 Create pricing system to offer special event Marketing Manager Jun 2011
price for qualified current customer
5 Increase the sale force personnel and HR Manager Jan 2011
telemarketers
6 Advertising in yellow pages Marketing Manager Aug 2011
7 Establish company website Management Team Apr 2011
8 Distribute new design and update brochure Sales representative Jul 2011
9 Form a van sales service team Marketing Manager Nov 2011

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10 Outsources part of the transportation Procurement Manager Sep 2011

service during festive season
11 Create proper criteria for screening and Marketing Manager Apr 2011
selection of new customers.
12 Intensive training to sales force team in Marketing Manager Mar 2011
technical knowledge
13 Establish sales strategy for each region Sales Representative Feb 2011

Metrics to be monitored during the implementation of the above marketing mix

strategy include weekly, monthly and quarterly sales volume to gauge progress towards
revenue, weekly, monthly and quarterly cost to gauge progress towards the break-even point,
weekly, monthly and quarterly sales by region to gauge progress of regional sales strategy,
weekly, monthly and quarterly sales by channel to gauge progress in channel efficiency.
Besides, quarterly financial measures will include return on sales by channel and by region
and return on investment in marketing.

(5577 words)

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8.0 Reference

DOSM – Department of Statistic Malaysia, 2010, ‘Gross domestic product/ gross

national income (updated 22/11/2010)’, The source of Malaysia official statistic,
viewed 31 December 2010. <http://blis.bernama.com/mainHome.do. >

DOSM – Department of Statistic Malaysia, 2009, ‘Malaysia reduces the number of

foreign workers’, Bernama Library and Infolink Services, viewed 31 December
2010,
<http://blis.bernama.com/mainHome.do. >

FAO – Food and Agricultural Organization, 2010, ‘FAO food price index’ , viewed
1 January 2011. <http://www.fao.org/worldfoodsituation/wfs-home/en/>

MOH – Ministry of Health. 2009. ‘Food Act 1983: Food Hygiene Regulation 2009’.
Viewed 2 January 2011. <http://fsq.moh.gov.my>

MOH – Ministry of Health. 2010. ‘Food Act 1983: Food Regulation 1985’. Viewed 2
January 2011. <http://fsq.moh.gov.my>

OPEC – Organization of the Petroleum Exporting Countries, 2010. ‘Monthly Oil

Market Report’ . Austria. Viewed 2 January 2011.<
http://www.opec.org/opec_web/static_files_project>

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Sundram, K. 2007. Meeting the rising health awareness: The palm oil formula.
Malaysian Palm Oil Board , Kuala Lumpur.

The Star, 2008. ‘Malaysia decides 2008’. Viewed 2 January 2011.

<http://thestar.com.my/election/maps/>

http://www.sinchianhing.com/
http://www.thiencheong.com.my/
http://www.nagajati.com/
http://www.jutafood.com.my/

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